Media mogul Michael MacMillan is back, sees ‘profound’ opportunity as he takes his company public

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Twenty-seven years after orchestrating his first reverse takeover, Michael MacMillan is at it again.

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The Canadian media mogul’s privately-owned global content company, Blue Ant Media Inc., is expected to go public in July via a reverse takeover of Boat Rocker Media Inc.

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Toronto-based Boat Rocker creates, produces and distributes scripted, unscripted and kids and family programming, including Top Chef Canada, The Amazing Race Canada, Palm Royale and Orphan Black.

As part of the deal, Blue Ant Media is acquiring Boat Rocker’s public listing, material cash on hand and three production companies: Insight Productions, Proper Television and Jam Filled Entertainment.

IDJCo, a new entity formed by three Boat Rocker executives, will buy Boat Rocker Studios, the brand and franchise management operations, creative and venture partnerships and content investment business, and will carry on business under the Boat Rocker name.

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MacMillan co-founded Blue Ant in 2011 and has built the company into an international powerhouse content-producer, distributor and channel operator, producing such shows as Canada’s Drag Race and owning specialty channels such as Love Nature and Cottage Life.

MacMillan will become chief executive of the new company, which will be named Blue Ant Media Corporation and, subject to regulatory approval, will trade on the Toronto Stock Exchange under the ticker BAMI.

The deal was proposed by Fairfax Financial Holdings Ltd., Boat Rocker’s largest shareholder and a shareholder and “backer of Blue Ant since day one,” said MacMillan. Fairfax will provide additional financial support for the transaction through a $20-million backstop commitment, and will also buy Boat Rocker’s minority interest in The Initial Group for $17 million.

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“In this market, it’s extremely difficult to do an IPO. There have been very few done in Canada, or the U.S. for that matter, in the past several years,” said MacMillan. “So, this was a quicker way for us to go public.”

The deal will also give Blue Ant a significant injection of cash. MacMillan said his company hasn’t raised capital since 2016 and has financed its growth using cash generated from annual earnings and the occasional asset sale.

As part of the transaction, Blue Ant will receive a minimum cash balance of $25.5 million and normalized net working capital, and USD$11.6 million in cash from the monetization of Boat Rocker’s ownership in Los Angeles-based The Initial Group.

“The media industry is seeing some significant challenges slash opportunity — depending on if the glass is half empty or half full — and we were interested in really trying to turbocharge our growth and grab hold of opportunities that we see in front of us today in an evolving media landscape. And to do that, we wanted access to more capital,” said MacMillan.

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A lot has changed in Canada’s media landscape since MacMillan co-founded Atlantis Films Ltd. in 1978 with just $300. Atlantis acquired Alliance Communications in a reverse takeover in 1998 and formed Alliance Atlantis Communications Inc., becoming a powerhouse studio and distributor.

MacMillan said acquiring Alliance and going public was a “seminal moment” at a time when the media industry was also undergoing significant changes.

“There were sort of winners and losers in the sense that if you could adapt to the changes, there were really cool opportunities, but if you couldn’t, you might end up being trampled on,” said MacMillan. “Trying to embrace new technology and change was one of the many lessons I learned about going public with Atlantis in the first place.”

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As head of a Canadian company with a global focus, MacMillan feels a sense of “profound optimism and opportunity” in the way technology and the Internet is changing the way his industry operates.

MacMillan said mergers and acquisitions will be a “a pretty significant tool in our growth kit,” and sees the biggest opportunities for Blue Ant in buying or launching more international channels focused on niche genres that travel well, have a long shelf life and don’t cost a fortune to create.

He also sees an opportunity in acquiring more existing catalogs of programming to fuel Blue Ant’s international distribution business and building additional international program production capacity.

“If you have a strong balance sheet and a smart management team who’s got experience and knows what they’re doing and is able to be a sensible allocator of capital, it’s one of the most important jobs of running a company, but certainly a public company as well,” said MacMillan. “I think there’s lots of reason to be optimistic, and that’s why we’re going public.”

• Email: jswitzer@postmedia.com

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